We just released a new analysis on CEO departure rates in the world’s largest companies. Robert Nardelli’s exit from Home Depot and John Browne’s early retirement from BP clearly show that CEO departures have lost none of their business impact or controversy. Thought I would share on my blog.

Upheaval in the chief executive suite is not in the exclusive domain of one region when it comes to the super class of CEOs in the world’s largest companies. Overall, a sizeable 15 percent of the world’s largest companies experienced a chief executive change in 2006 (10 percent in North America, 18 percent in Europe and 16 percent in Asia Pacific). The findings are based on CEO departures at the world’s 500 largest revenue-producing companies and show that disruption in the chief executive suite is clearly a worldwide phenomenon.

On a positive note, the proprietary analysis reveals that the overall departure rate of global 500 CEOs declined from 17 percent in 2005 to 15 percent in 2006 – an 11 percent drop proportionally. On a regional basis, the world’s largest companies headquartered in North America experienced the most marked decline, from 18 percent in 2005 down to 10 percent in 2006. In contrast, the world’s largest company CEOs in Europe saw a modest rise (from 15 percent in 2005 to 18 percent in 2006) while Asia Pacific witnessed no change.

Considering that the world’s leading 500 companies are responsible for generating approximately $19 trillion in revenue (or one third the GDP), quality CEO succession planning, leadership training and board accountability have far-reaching consequences, not only for individual companies but also for members of the worldwide business community.

We identified other significant shifts in the chief executive suite of the world’s largest companies:

** CEO Departures Cross All Regions
** Annual Global CEO Turnover Is Declining
** Countries with the Highest CEO Departures are the United States, Japan, Britain, Germany and France
** Reasons for CEO Turnover Take Many Forms – Nearly one-third (31 percent) of global 500 CEOs left against their will and over one-half (57 percent) retired or left office for reasons such as planned succession, promotion to chairman, political appointment or a new position at another company. The remainder (12 percent) exited due to mergers, illness, interim positions and corporate governance changes.
**More Insider Executives Become CEOs

Despite the good news that overall CEO churn among the world’s largest 500 companies appears to be slowing down, uncertainty from CEO change is felt from the boardroom to the mailroom. Whether CEO departures are due to standard succession planning, mergers, poor financial performance or wrongdoing, boards everywhere must fill the leadership pipeline with the best and the brightest for the challenging times ahead.

The challenge to our world’s business leaders is demonstrating to the best and brightest that the CEO position is worth aspiring to. When one global Fortune 500 company CEO leaves every five days, you have to ask yourself whether the job is worth it. How can we bring back the luster to the chief executive suite? I leave you with that question.

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